Principles of Economics, 7th Edition (MindTap Course List)
7th Edition
ISBN: 9781285165875
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Chapter 23, Problem 2PA
To determine
Why transfer payments are not included in the GDP .
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The government purchases component of GDP doesnot include spending on transfer payments such asSocial Security. Thinking about the definition of GDP,explain why transfer payments are excluded
What is the effect that changes in business taxes, personal income, and transfer payments have on a country’s gross domestic product (GDP).
Use the information below
Consumer spending = $200 million
Capital Consumption Allowance = $80 million
Investment spending = $55 million
Total Earnings of Citizens from abroad = $120 million
Total Earnings of non-citizens within the country = $50 million
State and local government purchases = $120 million
Federal government purchases = $80 million
Government purchases of housing units for the victims of typhoon = $200 millions
Imports = $50 million
Exports = $45 million
Income taxes = $100 million
Calculate for GDP
Calculate for GNP
Calculate for NNP
Chapter 23 Solutions
Principles of Economics, 7th Edition (MindTap Course List)
Ch. 23.1 - Prob. 1QQCh. 23.2 - Prob. 2QQCh. 23.3 - Prob. 3QQCh. 23.4 - Prob. 4QQCh. 23.5 - Prob. 5QQCh. 23 - Prob. 1QRCh. 23 - Prob. 2QRCh. 23 - Prob. 3QRCh. 23 - Prob. 4QRCh. 23 - Prob. 5QR
Ch. 23 - Prob. 6QRCh. 23 - Prob. 7QRCh. 23 - Prob. 8QRCh. 23 - Prob. 1QCMCCh. 23 - Prob. 2QCMCCh. 23 - Prob. 3QCMCCh. 23 - Prob. 4QCMCCh. 23 - Prob. 5QCMCCh. 23 - Prob. 6QCMCCh. 23 - Prob. 1PACh. 23 - Prob. 2PACh. 23 - Prob. 3PACh. 23 - Prob. 4PACh. 23 - Prob. 5PACh. 23 - Prob. 6PACh. 23 - Prob. 8PACh. 23 - Prob. 9PACh. 23 - Prob. 10PACh. 23 - Prob. 11PA
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- What are government transfer payments? Are they included as part of the government spending component of GDP?arrow_forwardWhat is the biggest spending component of GDP?arrow_forwardUsing the following information. Showing all working and calculate (i) Personal and disposable income (ii) Household consumption Expenditurearrow_forward
- what is the difference between Gross Domestic Product and Gross National Product? Would the difference be large or small for developed country? Defend your stand and give examplesarrow_forwardThe Equivalence of Expenditure and Income (in Billions of Dollars) Expenditure C: Consumer goods and services I: Investment in plants, equipment, and inventory G: Government goods and services X: Exports M: Imports GDP: Total value of output b. Gross private investment % % c. Total government purchases % d. Exports e. Imports % $14,561 Instructions: Enter your responses as a percentage rounded to one decimal place. Calculate the following as a percentage of GDP for 2019: a. Personal consumption expenditures % 3,744 3,754 2,504 (3,136) $21,427 Wages and salaries Corporate profits Proprietors' income Income Rents Interest Taxes on output and imports Depreciation Statistical discrepancy Total value of income $11,434 2,075 1,658 778 645 1,494 3,463 (120) $21,427arrow_forwardA. The table below shows the national income of a country in 2012. Use the data to answer the questions that follow: ITEMS $ MILLIONS Personal Consumption Expenditure 640.00 Gross private Domestic Investment 180.00 Government Expenditure 220.00 Exports of goods and services 175.00 Imports of goods and services 202.00 Subsidies 48.00 Indirect business taxes 322.00 Consumption of fixed capital 115.00 Net property income from Abroad 80.00 i. Define Gross Domestic Product (GDP ii. Calculate the: a. Gross Domestic Product (GDP) b. Gross National Product (GNP)arrow_forward
- Briefly describe the demirits of state enterprise in the field of national income?arrow_forwardeconomicarrow_forwardThe following table shows the national income data for an economy in year 2020. ITEMS Dividends Interest on government loan Undistributed profit Gross interest Subsidies Corporate income taxes interest on consumer loan Indirect taxes Gross Domestic Product at factor cost Depreciation Wages and salaries Rent Corporate income before taxes You are required to calculate: (a) net interest. (b) corporate profit. (c) National Income. (d) Gross National Product at factor cost. Net factor income from abroad. RM (Million) 160 100 125 990 120 180 90 160 4,370 250 1,080 645 710arrow_forward
- Please give me the correct answerarrow_forwardThe four parts of Gross Domestic Product (GDP) are: A. consumption, investment, government, and net exports B. consumption, investment, government, and imports C. consumption, investment, government, and exports D. consumption, investment companies, government, and net exportsarrow_forwardGross domestic product (GDP) is a key measure of the national economy. a) Define GDP and describe three ways of calculating the size of GDP in an economyarrow_forward
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